City heavyweights flee Russian corporate boards in London

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Former cabinet ministers and city greats who have spent the last decade earning big paychecks on the boards of Russian-backed companies are now rushing to cut ties.

London has attracted dozens of Russian companies over the past two decades. Many have sought to hire ex-politicians, like Greg Barker of metals group EN+, or City veterans like Xavier Rolet of fertilizer group PhosAgro.

This week, both men resigned from their posts, adding to the exodus of board members from Russian-backed companies to London.

“Having the right board members has clearly helped Russian companies open doors and gain credibility,” said Tom Keatinge, director of the Center for Financial Crime and Security Studies at think tank Rusi. “Executives have allowed their reputations to be co-opted by these companies for a fee.”

Evraz’s board, whose biggest shareholder is sanctioned oligarch Roman Abramovich, resigned en masse this week, including Sir Michael Peat, former principal private secretary to the Prince of Wales.

Six Polymetal board members also resigned, including its UK chairman, while Richard Brasher, a former Tesco executive, left the board of X5, a Russian supermarket, and Joan MacNaughton left En+.

Russian Internet services groups VK and TCS Group also announced the departure of non-executive directors.

Many will have made the decision to leave under increasing pressure from politicians and business groups. The Institute of Directors has called on all UK executives to stop getting involved in businesses linked to the Russian economy.

“These decisions were forced upon them,” Keatinge said. “They waited for the last possible moment when it became untenable. You don’t have to applaud them. »

But while board members can sever ties and move on, shareholders end up with heavier losses. According to an analysis by investment bank Cowen, around $330 billion was wiped off the value of Russia-linked companies that used London for their secondary listings between the start of the dispute and when most of them have been suspended.

Here, the Financial Times takes a look at five directors who helped run Russian-backed businesses in the UK.

Xavier Rolet, PhosAgro

Former London Stock Exchange boss Xavier Rolet joined the board of Moscow-based fertilizer company PhosAgro in 2018 and became its chairman in 2019.

He announced his resignation on Thursday, a day after the company’s chief executive and largest shareholder, Andrey Guryev, was sanctioned by the EU.

© Kiyoshi Ota/Bloomberg

A few days earlier, Rolet, a seasoned banker and dealmaker, said in a statement that “the logic of using the weight of sanctions, boycotts and public pressure to punish LSE-listed companies for the failures of politics and negotiation frankly escapes me”.

Trading in PhosAgro shares was suspended in London on March 3.

Rolet, who could not be reached for comment, earned 11.9 million rubles in 2018, 21.3 million rubles in 2019 and 27.1 million rubles in 2020, according to PhosAgro’s latest annual report. Using the average exchange rates for each of these years, this equates to £141,000 in 2018, £258,000 in 2019 and £292,000 in 2020. The financier was awarded the Order of Friendship of the Russian Federation in 2017.

Sir Michael Peat, Evraz

The accountant and former private secretary to Prince Charles was, until Friday’s board exodus to Evraz, the steel company’s most prominent British non-executive. He joined the board in October 2011, shortly before Evraz’s main listing on the London Stock Exchange in December.

Peat was due to formally step down at the end of this month but left on Friday, alongside two other British non-executives, former Ford executive Stephen Odell and Deborah Gudgeon, a former Deloitte director.

© Max Mumby/Indigo/Getty Images

He earned just over $2.5 million during his years at Evraz, according to the company’s annual accounts. His last role was as a senior independent non-executive. Peat did not respond when asked to comment on his role at Evraz.

The son of an illustrious family – Sir William Peat, his great-grandfather, was one of the founding partners of what became KPMG – Peat himself became a partner at KPMG in 1985.

He conducted a consultancy study on the management and finances of the royal household in 1986-87 and was subsequently asked to implement its recommendations. He joined the Royal Household in 1993, serving in a number of roles there, including as Keeper of the Queen’s Privy Purse, before retiring in 2011.

Jim Rutherford, Evraz

Jim Rutherford, who quit the Evraz board a week ago – ahead of the main exodus of directors – is a former City analyst and fund manager.

During a 16-year career at Capital Group, he became one of the most powerful institutional investors in metals and mining companies.

After leaving Capital in 2013, Rutherford, originally from Belfast, joined the board of Anglo American, where he was a non-executive director for almost seven years.

In 2017, the Financial Times reported that Anglo American blocked Rutherford from taking a position on the board of En+, the metals and energy group then controlled by Russian oligarch Oleg Deripaska.

Rutherford joined Evraz’s board in June last year and was paid $125,000, according to its 2021 annual report.

He is also chairman of Centamin, an Egyptian gold company listed in London, and senior independent director of Anglo Pacific, a mining finance company.

In a statement, Rutherford said: “My decision to resign, which was notified to the company a few days before, was a very personal choice. I condemn in the strongest possible terms the senseless Russian invasion of Ukraine. .

“At no time while I was a non-executive director of Evraz, nor during my due diligence process prior to joining the board, did I see anything that would in any way contradict the firm denials made by the company in response to accusations by the UK Financial Sanctions Enforcement Office.

Greg Barker (Lord Barker of Battle), EN+

Former MP Greg Barker became non-executive chairman of EN+ in 2017 when the Russian metallurgical group floated on the London Stock Exchange.

At the time EN+ was controlled by Oleg Deripaska. The Russian oligarch later relinquished the majority of the company when he was hit with US sanctions over his Kremlin ties.

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Barker was named executive chairman in 2019 after reaching an agreement with the US Department of Justice to release the company from sanctions.

He received a $5.9 million bonus for his role in the negotiations, which he described at the time as “relatively modest”, in addition to a salary of $1.9 million. He earned $4 million in 2020. His salary for 2021 was not disclosed, while 2017 and 2018 did not disclose his compensation.

Before joining EN+, Barker was an MP for 14 years and served as climate change minister in David Cameron’s coalition government. He resigned in 2015 and became a peer.

Before entering politics, he was responsible for international communications at Sibneft, the Russian oil company then owned by Roman Abramovich and Boris Berezovsky. Barker declined to comment.

Bruce Buck, Chelsea Football Club

Bruce Buck had already been a season ticket holder at Chelsea for over a decade when Roman Abramovich asked the former lawyer to advise him on his acquisition of the football club for £140million in 2003.

Buck once rejected the label of “Abramovich’s right-hand man” and instead called himself “the man with the little toe on the left foot”.

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The American, who has lived in London since the early 1980s, has been chairman of Chelsea since the acquisition. Buck’s role at the club has given him status in English football: in 2019 he led the search for a new Premier League chief executive.

Buck’s relationship with Abramovich grew out of the lawyer’s time in London at the American law firm Skadden Arps in the 1990s. Skadden prospered by establishing ties with newly wealthy Russian businessmen who built fortunes by acquiring state assets in the 1990s, including Abramovich through his stake in the Sibneft oil group.

Abramovich has relied on Skadden for legal advice beyond football matters, including during his successful legal battle against Boris Berezovsky, his former friend and mentor who fled Russia in 2000 after a clash with Vladimir Putin.

Skadden received at least £2.6m in fees from Chelsea from 2004 to 2017, according to club accounts, a fraction of the £35m the company received in the Berezovsky case in 2012.

Skadden and Buck declined to comment.

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